Panama: Transforming The Economy :: Rosemary Piper
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TRANSFORMING THE ECONOMY PANAMA: Rosemary Piper Deputy Director National Competitiveness Center Caribbean Growth Forum, Kingston, June 2012
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Transcript of Panama: Transforming The Economy :: Rosemary Piper
TRANSFORMING THE ECONOMY
PANAMA:
Rosemary PiperDeputy Director
National Competitiveness CenterCaribbean Growth Forum, Kingston, June 2012
Quick Economic Overview:Gross Domestic Product
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
0
5,000
10,000
15,000
20,000
25,000
Year %2001 0.6%2002 2.2%2003 4.2%2004 7.5%2005 7.2%2006 8.5%2007 12.1%2008 10.1%2009 3.9%2010 7.6%2011 10.6%
• 2012’s government forecast: 10%
Gross Domestic Product: Contribution by Sector
Construction
Commerce
Transport, storage, communica-tions
Financial
Real estate, renting
Manufacturing industries
Others
Total • Colon Free Zone, ports, Panama Canal and telecommunications: 24.2% • Commerce: 15.2%• Financial: 8.1%• Construction: 6.1%
Foreign Direct Investment
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
0
500
1,000
1,500
2,000
2,500
3,000 FDI (in USD billions)
• Last year: ports, mining and tourism• Historic level in 2011: $2,790 Billions• Source of innovation and “learning by doing”• In 2010 LAC was the destiny of 10% of the
FDI up from 5% in 2007
Competitiveness
Ultimate goal• Achieve sustainable development to
improve the citizens’ quality of life
Why we need to measure• “You can’t control what you don’t
measure and you can’t improve what you cannot control”
Important Competitiveness Indexes
SourcePanama’s Position (# of countries)
2007 2009 2011 2012
World Bank (Doing Business Index)
81 (175)
81
(181)
63 (183)
61 (183)
World Economic Forum (Global Competitiveness Index)
59 (131)
59 (133)
53 (139)
49 (142)
GCI: Evolution 2005-2011
2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-201245
50
55
60
65
70
65
6059
5859
53
49
GCI = ???
Indexes Analysis
Mobile telephone subscriptions
Soundness of banking system
Financial market
Buyer sophistication
Life expectancy
Government surplus
Infrastructure: ports and airports
STRENGTHS (Advantages)
Indexes Analysis (cont.)
Domestic market size
Rigidity of employment
Internet access in schools
Quality of primary education
National savings rate
Quality of roads
Judicial independence
IMPROVEMENT OPPORTUNITIES (Disadvantages)
Panama’s Commitment to Promote Competitiveness and Sustainable Growth
1. Prioritize public investment in sectors where a comparative advantage exists
2. Assure transparency in all government’s actions to safeguard investor’s trust
3. Strengthen the internal market within a safe environment to stimulate the confidence of producers4. Guarantee a simple and fair distribution of the tax
burden, while maintaining competitiveness within sectors5. Maximize the government’s investment, increase
income, establish outlines for public-private participation and diminish the operative expenses.
Alberto Vallarino, Minister of Economy and Finance at the 4th National Competitiveness Forum, Panama City , November 2009
Economic Sectors Hierarchy and Potential
Competitive advantage
Economic impact on GDP
Social impact(jobs)
Logistics
Tourism
Agriculture
Off-shoring services
Maritime services
Private health services
Regional headquarters of multinationals
Growth Boosters
Future Potential
Financial Services
Government´s capacity to intervene
Alberto Vallarino, Minister of Economy and Finance , on the Government´s Strategic Plan 2010-2014, November 2009
Some Reforms and Actions Businesses:
Law 34 of 6/5/2008: Social Fiscal Responsibility○ Requires financial and public investment planning
Law 41 of 8/24/2007: special regime for the establishment and operation of headquarters○ Drives AEEPP (Howard, a former US Base)
Laws 5 of 01/11/2007 and 31 of 07/22/09: speeds up businesses opening○ PanamaEmprende
Taxes payments via internet Energy:
Energy Savings Plan in effect for the public sectorLaw frameworks in progress: program to establish the rational
and efficient use of energy; Eolic Law and Bio-fuel Law
Infrastructure:Extension of the Panama-Colon Highway“Metro” systemPanama Bay’s clean-upReorganization of the roads system
Technology and InnovationLaw 59 of 08/11/2008: promotes digital inclusion
○ Universal Internet access○ “Panama Inteligente” (by 2014): a paperless country (E-
justice; E-exports…)
Some Reforms and Actions (cont.)
Actions Led by the NCC
2st NCF 3rd NCF 4th NCF 5th NCF
5%
13%18%
14%
38%
31%
23%
29%
57% 56%59%
57%
In process Completed Pending In process Completed Pending
Status of implementation of the previous year's Action Agenda
Source: National Competitiveness Center
National Competitiveness
Forum:A public-private encounter
to build consensus
○ The “Action Agenda”○ Implementations follow-up
Monitoring of competitiveness indexes
• Thorough analysis• Joint efforts with
SEAC• Workshops with
local partners Investigation, analysis
and diffusion
Actions Led by the NCC (cont.)
Final Words…The nation’s competitiveness hinges on the “smart
management” of micro and macroeconomic forces, and the willingness of individuals, enterprises, and
policymakers to work hand-in-hand to meet shifting challenges.
If a country is to reach a sustainable level of development,
both government and businesses must move in tandem toward common goals: contributing to the improvement of the quality of life for all citizens, overcoming the barriers of
unemployment and poverty, and improving productivity across the board.
Competitiveness is not exclusive to a single group or sector; it can be achieved only through a joint effort.
Competitiveness is not a destiny, it is a path…
NATIONAL COMPETITIVENESS CENTER
TOGETHER WE DO IT BETTER!
A not-for-profit private organization with apublic-private board of trustees
www.cncpanama.orgJusto Arosemena Ave. and 31st Street
Panama City, Republic of Panama(507) 394-4363 or 394-4364
